How Manchester City won the stadium lottery

As Tottenham and West Ham put forward proposals for setting up home in the
London 2012 Olympic Stadium once the IOC flame is extinguished, it is worth
remembering that Manchester City have already pulled off a similar trick
following the 2002 Commonwealth Games. And did very nicely out of it too.

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How things used to be: The City of Manchester Stadium shortly before the 2002 Commonwelth Games for which it was builtPhoto: GETTY IMAGES

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Fit for purpose: Manchester City's Eastlands home is one of the best stadiums in the Premier LeaguePhoto: GETTY IMAGES

The desire to avoid leaving white elephants stalking English cities after major sporting events is not something exclusive to London.

Back in 2002 when Manchester successfully hosted the Commonwealth Games, minds were focused on what to do with the main stadium after the athletes had left. Athletics alone, with the best will in the world, could never hope to generate the revenues needed to cover the running costs. Football, on the other hand, could. And with Manchester City’s Maine Road stadium some way beyond its finest days a natural solution existed.

The City of Manchester Stadium was paid for by tax payers and lottery revenue. Specifically the tax payers of Greater Manchester. The stadium is owned by the City of Manchester Council, who agreed to lease the stadium to City from 2003, at favourable rates.

The City of 2003 were a different animal to that of today. More concerned with relegation battles than title challenges, the club, in common with most Premier League teams, was saddled with debt, struggling to keep their head above water in an era of increasingly lavish spending.

Had Sheikh Mansour bin Zayed al Nahyan been in situ then a different deal might have been struck. Or perhaps it only served to encourage him to invest in the first place.

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It cost City around £20m to reappoint the stadium to covert it from athletics to football, taking out the running track, putting in corporate boxes, concession stands and shops. The rent paid to the council was to be derived from match day income, specifically ticket sales.

No money was due if the attendance did not top the 32,000 capacity of Maine Road, while half the price of tickets sold above that level would be paid over, after associated costs had been factored in.

All this on a 250-year lease for a stadium the £110m cost of which had been covered by £77m of lottery grants and £33m from the council.

Times change. City are now the wealthiest football club in the world, benefiting from the deep pockets of their oil rich owners. Owners who have bought up land around the stadium with the intention of, as reported in the Manchester Evening News late last year, ‘considering potential development as part of a contribution to the regeneration of east Manchester’.

Such development is fuelled by having one eye on Uefa’s financial fair play rules and the need for City to generate their own income aside from the largesse of their owners or risk being barred from the Champions League from 2013, the entry to which their project is propelling them towards at breakneck speed.

With this new landscape has come the renegotiation of the lease. An agreement is in place now to switch from the match day revenue model to a flat £3m yearly charge. Loose change to a club that can waste £17m on the privilege of having Roque Santa Cruz sit on the bench on match days but nonetheless a 50 per cent increase on the roughly £2m generated in each of the last three years under the current terms.

For that modest sum City have the unlimited use of a superb, modern 48,000 capacity stadium that was paid for by scratch card junkies and the City of Manchester Council, who today announced the redundancies of 2,000 of its work force due to the austerity cuts that are starting to slice up the nation’s public sector.